Engineering Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 46,000 engineering services firms in the US provide evaluation, investigation, planning, design, and development services related to utilities, structures, buildings, machines, equipment, processes, or systems. Specialty areas include civil, mechanical, industrial, electrical, electronics, computer hardware, aerospace, environmental, chemical, health and safety, materials, petroleum, nuclear, and biomedical engineering. Firms work on specific projects for clients and must be adept at project planning and management.
Dependence on Highly Skilled Personnel
Engineering service firms rely on a highly-educated, professional workforce.
Liability
Work site hazards and the complexity and scale of engineering projects expose engineering services firms to liability.
Industry size & Structure
A typical engineering services firm operates out of a single location, employs 25 workers and generates around $6.6 million in annual revenue.
- The engineering services industry consists of about 46,000 companies that employ over 1 million workers and generate $303 billion annually.
- Customer industries include general building, transportation, petroleum, power, hazardous waste, water, sewer/waste, industrial, and manufacturing.
- The engineering services industry is fragmented: The 50 largest firms account for only about 35% of industry revenue.
- Large companies include Fluor, Bechtel, and AECOM.
Industry Forecast
Engineering Services Industry Growth
Recent Developments
Nov 26, 2024 - Construction Opportunities, Challenges for 2025
- Construction industry economists and other experts outlined the potential opportunities and challenges the sector faces in 2025 during a November webcast hosted by construction software firm ConstructConnect. Moderating inflation is a key tailwind for the construction sector, as prices for most inputs have fallen. Lead times for many products have also dropped, except for certain types of electrical equipment. Construction industry observers also anticipate the incoming Trump administration will curb regulations, which could speed up project starts. However, Donald Trump’s plan to implement tariffs could increase prices for construction inputs and possibly spark a trade war. The Trump administration is also expected to be less supportive of projects funded through Biden-era programs, including the Infrastructure Investment and Jobs Act, the Chips and Science Act, and the Inflation Reduction Act. The construction sector also lacks enough workers, a condition that could worsen amid a Trump crackdown on immigration.
- IThe Associated Builders and Contractors (ABC) Construction Backlog Indicator fell 0.2 months to 8.4 months in October compared to September. Backlogs were flat compared to October 2023. The infrastructure segment backlog increased by 1 month to 8.9 months compared to September. The heavy industrial backlog fell by 0.8 months, and the commercial and institutional backlog dropped by 0.4 months. The ABC’s Construction Confidence Index for sales rose to 59 in October from 58.1 in November. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said that while the backlog fell in October, it remained healthy and has been stable throughout the year. October’s survey results showed that 53% of ABC members expect their sales to rise over the next six months, while only 22% expect sales to decline.
- In October, the Department of Transportation (DOT) announced $4.2 billion in grants for infrastructure projects through the Infrastructure Investment and Jobs Act. The grants will fund a total of 44 projects. The National Infrastructure Project Assistance (Mega) program is providing $1.7 billion in funding for 11 projects, and the Infrastructure for Rebuilding America (INFRA) will provide $2.5 billion for 33 projects. The DOT grants will fund highway, bridge, port, and other infrastructure projects in several states, and projects in three states (Arizona, Massachusetts, and Rhode Island) received grants from Mega and INFRA.
- Most civil engineers are satisfied with their compensation, as salaries continue to rise, although salaries in 2024 increased slower than in previous years, according to a recent survey by the American Society of Civil Engineers (ASCE). The median salary for civil engineers in 2024 was $135,000, up 6% compared to the ASCE survey in 2023. However, the base salary increase in 2024 was 5% compared to 7% in 2023 and 6% in 2022. More than 8% of civil engineers surveyed reported changing jobs voluntarily over the last year. Of the civil engineers who changed jobs, the top reason was better pay (73.6% of respondents), followed by new responsibilities (60.4%) and career advancement (57.1%). More than 85% of respondents reported being either satisfied or very satisfied with their jobs.
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